EasyJet founder Haji-Ioannou refuses to approve accounts

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Relations between EasyJet founder and director Stelios Haji-Ioannou and the company's management appear to have deteriorated further, after he refused to approve the budget airline's accounts.

Haji-Ioannou has become increasingly concerned over certain accounting policies adopted by the board, particularly since EasyJet's acquisition of GB Airways.

In a statement released alongside EasyJet's full-year results today, Haji-Ioannou claims these policies are "at odds with current commercial realities and the macro-economic climate".

He believes the company should consider its business at a fundamental level - monitoring profitability by flight, route and aircraft - rather than considering it as a single cash-generating unit.

EasyJet would be able to assess the performance of corporate acquisitions such as GB Airways, he says, by dividing the business into multiple cash-generating units.

While EasyJet has assigned a fair value of £72.4 million ($108 million) to London Gatwick slots picked up along with GB Airways, Haji-Ioannou disagrees with their valuation.

"I believe the methodology by which EasyJet ascribed value on its own balance sheet to the Gatwick landing slots that came for free with GB Airways is based on optimistic assumptions about future revenues, particularly in the current economic climate," he says.

"Given the fact that many airlines have already ceased operating from Gatwick I believe that slots will be freely available and hence it will be more prudent not to create Gatwick slots as an 'intangible asset' on our own balance sheet this year."

He also believes that EasyJet should write down the value of seven Airbus A321s owned by GB Airways - basing his argument, ironically, on information in rival Ryanair's accounts regarding the market value of the jets.

As a result of these concerns, Haji-Ioannou says: "I am left without any other options but to abstain from voting on the accounts as a director of EasyJet.

"I am doing so reluctantly but I believe it is in the interest of all shareholders to be more prudent at the present time."

EasyJet states that the rest of the board are unanimous in their approval of the accounts.